A Quote by Franklin Raines
And so the danger for the housing industry is if we see interest rates rise.
Quote Topics
Quote Author
Related Quotes
Stock price multiples are negatively correlated with real interest rates. As interest rates rise, the market multiple will fall.
If inflation is brought down, interest rates will fall. Once rates fall, we have the opportunity to maybe achieve the goal of 'housing for all' faster; take roads, infrastructure to India's interiors.
The Obama administration deserves credit for quickly ending the housing free fall. In particular, Obama empowered the Federal Housing Administration to ensure that households could find mortgages at low interest rates even during the worst phase of the financial panic.
The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.
If we are going to have a Fed, it should not fall into the tyranny of experts with the a fatal conceit that a few wise people can determine interest rates. Interest rates should be driven by the market, and people's time preference, and we see these boom-bust cycles.
When interest rates are high you want the average direction in which interest rates are moving to be downward; when interest rates are low you want the average direction to be upward.
The degree of monetary policy ease should be associated with the level of real interest rates, not nominal interest rates.
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.
We create these boom-bust cycles by manipulating the money supply and the interest rates and directing it where it went in. And that is what happened with housing: pushed into housing combination of easy money plus all the regulations, and we created this boom-bust cycle, and corruption, because corruption goes with it, because you don't have the same discipline. So we've got to stop all that.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
If you let interest rates be freed, be set by the free market, they would rise dramatically. There would be a lot of broken furniture on Wall Street. It needs to be broken. The back of the speculative bubble would be broken and we could slowly heal the financial system. That's what I think we need to do but it's never going to happen because there's trillions of asset values dependent on the Fed continuing to suppress, repress interest rates and shovel $85 billion a month of liquidity into the market.
Let's have honest interest rates. Let's let the free market set interest rates in that zone where supply of savings is matched up with demand for real borrowing for capital projects.
When regulations on the housing industry are reasonable, the cost of housing goes down. Regulatory relief is needed to make housing more affordable to more Americans.
Here's the interesting thing: the fact that QE and lowering interest rates almost to zero has worsened inequality, does not mean that raising interest rates will help reduce inequality.
According to the Bank of England the economy is growing too fast so interest rates must rise to counter the supposed inflationary threat.
Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.
Related Authors
Bill Gates Quotes
American
Businessman
Charlie Munger Quotes
American
Businessman
Dieter F. Uchtdorf Quotes
German
Businessman
Henry Ford Quotes
American
Businessman
Jim Rohn Quotes
American
Businessman
Joseph B. Wirthlin Quotes
American
Businessman
Mark Cuban Quotes
American
Businessman
Mark Zuckerberg Quotes
American
Businessman
Peter Drucker Quotes
American
Businessman
Richard Branson Quotes
British
Businessman
Russell Simmons Quotes
American
Businessman
Sam Altman Quotes
American
Businessman
Steve Jobs Quotes
American
Businessman
Tom Peters Quotes
American
Businessman
Walt Disney Quotes
American
Businessman
Warren Buffett Quotes
American
Businessman